The facts published by Malaysia’s Public Accounts Committee have proved that the constant denials issued by Jho Low, Najib Razak, Shahrol Halmi and their friends at PetroSaudi over the past few months about 1MDB were repeated lies.

For example, Low has officially claimed that he had no involvement in 1MDB beyond May 2009, when he allegedly stepped down from his post as Najib’s official ‘Advisor’ to the fund.

In the same vein, Najib Razak has claimed he performed a distant ‘advisory role’.

So, setting aside all the evidence of the emails from the PetroSaudi database, published by Sarawak Report, which PetroSaudi have libellously accused us of “tampering”, we now have the official report of the supreme Parliamentary authority on the matter.

The PAC report has confirmed that Najib was the sole shareholder and signatory for the fund – and now for the first time Sarawak Report is able to publish the actual documents to show the proof. These company records show that from start to finish, Najib was signing off on resolutions, which the Prime Minister plainly knew were riddled with lies.

Government to Government with ‘KSA’

Take, for example, the on-going fiction that the PetroSaudi deal was a ‘government to government’ joint venture with the Kingdom of Saudi Arabia. Najib was still signing documents alluding to this bogus claim as late as 2011, when he sent off yet another whopping sum of US$125 million, borrowed by 1MDB, supposedly again to PetroSaudi.

Still blagging about a government to government venture as late as 2011!

The fact that PetroSaudi had nothing to do with the Kingdom of Saudi Arabia and was merely a small private company, in which the King’s seventh son had a 50% share, was plainly known to Najib, since the beneficial owners had to be declared to the banks (we have already shown the documents).

We also have emails from shareholder Tarek Obaid’s brother warning that PetroSaudi must tone down Najib’s proposed press release at the launch of the joint venture, to make sure 1MDB did not mislead the international press with claims of a ‘government to government’ venture.

Warnings from the start about misleading claims that PetroSaudi was a Saudi government company

The email trails show exactly how this matter of presenting the company as somehow linked to the Kingdom of Saudi Arabia was discussed between the PetroSaudi directors, Jho Low (back-copied on all correspondence) and Shahrol Halmi on behalf of the PM.

Najib wanted to give a false impression that the company was an official organ of the state and was involved in minute detail in the drafting of the public announcements, according to this evidence:

OK – h ow about this. Can you help verify Tarek’s preferred form of address?

PRESS RELEASE

Joint Press Statement by PetroSaudi International and 1Malaysia Development Berhad

PetroSaudi International Limited and 1Malaysia Development Berhad in US$2.5 billion joint venture Partnership, opens new door to FDIs

KUALA LUMPUR, 30 September 2009: Malaysia and Saudi Arabia today entered a new era of economic cooperation with the setting up of a US$2.5 billion joint venture company, which will spearhead flow of foreign direct investments from the Middle East as well as well as make strategic investments in high-impacts projects here.

The joint venture company (“JVC”) is the result of a partnership between Malaysia Development Berhad (“1MDB”) and PetroSaudi International Limited (“PSI”)

This venture is the first undertaken by PSI in this region and underscores the confidence Saudi Arabia has in Malaysia and economic prospects here.

The 1MDB is wholly owned by the Government of Malaysia and was established recently to drive strategic initiatives for long-term sustainable economic development and promote in flow of FDI into the country. PSI, based in Al-Khobar, Saudi Arabia, is mandated to carry out investments which can strengthen the relationships between the Kingdom of Saudi Arabia and key countries worldwide.
The JVC’s objective is to seek, explore, and participate in business and economic opportunities which results in the enhancement of and promotion of the future prosperity and long-term sustainable economic development of Malaysia. It is also expected to actively make investments in the renewable energy sector.

The JVC is also expected to be a vehicle for investments from the Middle East into the region, thereby giving Malaysia the edge in drawing investments from the cash and resource-rich region.

PSI’s CEO Sheikh Tarek Obaid said: “Malaysia has long been a model of stability and development fordeveloping countries. We believe that recent economic liberalisation
policies announced by the Prime Minister will only make Malaysia a more attractive place for investors. We envisage Malaysia becoming an important partner for the Kingdom of Saudi Arabia.”

Also lauding the setting up of the JVC was 1MDB’s CEO Shahrol Halmi.
He said: “The JV C is set to further increase foreign direct investment from the Middle East, in particular Saudi Arabia. We will leverage on PSI’s strong international presence, their networks and expertise to
promote Malaysia as the preferred investment destination.”

The JVC will initiate various projects in multiple sectors which are mutually beneficial as well as in line with 1MDB’s mission to drive long-term sustainable economic development in Malaysia.

Thanks. The other thing which would be great is if we could just call it a multi-billion JV without getting into numbers. Being specific causes all sorts of problems back home. These guys prefer secrecy… Let me know. Many thanks

Shahrol – please give me a little time to get back to you. I have no authority to allow a press release where HRH is quoted. I don’t t hink he will want to. Can we please have this be a quote from Tarek instead of him? You can refer to Sheikh Obaid etc. I would much prefer this and it will be easier to get by on my side. Please check on your side but if we make this Tarek, then we should be mostly ok. Thanks

Hi Patrick, can you help take a look and see if this is ok? The PM insisted on the quote from HRH Prince Turki and the equity figures. This statement is going to be released only to the local media, but there is no guarantee that the wire services won’t pick it up. Planning to send this out late morning tomorrow, Malaysia time.

PetroSaudi International Limited and 1Malaysia Development Berhad in US$2.5 billion joint venture Partnership, opens new door to FDIs

KUALA LUMPUR, 30 September 2009: Malaysia and Saudi Arabia today entered a new era of economic cooperation with the setting up of a US$2.5 billion joint venture company, which will spearhead flow of foreign direct investments from the Middle East as well as well as make strategic investments in high-impacts projects here.

The partnership between Malaysia Development Berhad (“1MDB”) and PetroSaudi International Limited (“PSI”) involves the creation of a joint venture company (“JVC”) with an initial capital of US$2.5 billion in which 1MDB and PSI will be contributing US$1.0 billion and US$1.5 billion in equity respectively.

This venture is the first undertaken by PSI in this region and underscores the confidence Saudi Arabia has in Malaysia and economic prospects here.

The 1MDB is wholly owned by the Government of Malaysia and was established recently to drive strategic initiatives for long-term sustainable economic development=2 0and promote in flow of FDI into the country. PSI, based in Al-Khobar, Saudi Arabia, is mandated to carry out investments which can strengthen the relationships between the Kingdom of Saudi Arabia and key countries worldwide.
The JVC’s objective is to seek, explore, and participate in business and economic opportunities which results in the enhancement of and promotion of the future prosperity and long-term sustainable economic development of Malaysia. It is also expected to actively make investments in the renewable energy sector.

The JVC is also expected to be a vehicle for investments from the Middle East into the region, thereby giving Malaysia the edge in drawing investments from the cash and resource-rich region.

PSI’s Chairman HRH Prince Turki Bin Abdullah Bin Abdulaziz Al-Saud said: “Malaysia has long been a model of stability and development for developing countries. We believe that recent economic liberalisation
policies announced by the Prime Minister will only make Malaysia a more attractive place for investors. We envisage Malaysia becoming an important partner for the Kingdom of Saudi Arabia.”

Also lauding the setting up of the JVC was 1MDB8 0s Chairman Dato’ Mohd Bakke Salleh.
He said: “The JVC is set to further increase foreign direct investment from the Middle East, in particular Saudi Arabia. We will leverage on PSI’s strong international presence, their networks and expertise to
promote Malaysia as the preferred investment destination.”

The JVC will initiate various projects in multiple sectors which are mutually beneficial as well as in line with 1MDB’s mission to drive long-term sustainable economic development in Malaysia.

Ironically, PetroSaudi has been threatening to sue journalists for suggesting that Prince Turki was even a shareholder of the company (which he exited later in 2014). Surely it ought to be suing Najib for claiming it was owned by the Kingdom of Saudi Arabia and indeed King Abdullah himself?

Jho Low phoned Najib during Board meeting to over-rule 1MDB Chair

Meanwhile, in September 2009, Jho Low, far from having quit, was attending board meetings of the fund and calling the shots, most particularly at the crucial meeting of September 26th, just two days before Najib and the executives from PetroSaudi signed their joint venture deal.

Sarawak Report has learnt that the former Chairman, Bakke Mohd Saleh, was particularly vocal and tough at this meeting, insisting that proper checks should be made before a billion dollars were hastily invested in a company, which the Board had not heard of until a week before.

In response, we have been reliably informed, Jho Low dialled up the PM on his handphone, which he then passed to board members, in order to be informed ‘from the top’ that the deal was authorised to proceed! So, who do we conclude was running the show?

The result was a reluctant concession by the 1MDB board that the joint venture with PetroSaudi should be approved, but only subject to conditions, such as a proper and independent valuation of the company.

CEO Shahrol Halmi simply ignored those conditions and sent off the money anyway (mostly to a third party company, Good Star Limited, owned by Jho Low). His excuse? Section 117 of the articles of the company meant that the real boss was Najib, so it was Najib whom he chose to obey!

Converting PetroSaudi JV to a ‘Muharaba loan deal’

Other documents accessed by Sarawak Report show how Najib signed off on later major decisions. This included changing the relationship with PetroSaudi from a joint venture to a ‘Muharaba loan’ arrangement just six months later:

The details of the Joint venture (and payment to Good Star) were left out of the Audit through this accounting device

The point of this ‘sale share agreement’, say accountancy experts, was to hide the details of the joint venture (and the payment to Good Star) by superseding the arrangement – the manoeuvre was conducted just days before the end of the financial year.

Even so, auditors Ernst & Young were not happy with the information that they had been passed by 1MDB it has emerged. The Hansard notes of the PAC meetings and PAC report make clear the frictions – the auditors having demanded to see the financial statements of the joint venture company from September 2009 and also documentary proof of the value of the assets of PetroSaudi, before agreeing to sign off on the 2009/10 accounts.

1MDB failed to produce these basic documents and, instead, the records show that Najib signed off on a resolution to sack these pesky and demanding accountants, who were wanting proof about the value of the PetroSaudi deal:

High-handed? Najib sacked the auditors who were making basic checks on his dodgy deal

Ernst & Young were replaced, according to the order signed by Najib, with KPMG.

However, by the end of 2013 KPMG were also terminated in much the same way by Shahrol Halmi’s successor, Mohd Hazem Abd Rahman, again owing to over-persistent questions about what proof 1MDB could provide as to the value of its much vaunted ‘US$2.23 billion’ Cayman Island investment with the shadowy company Bridge Partners.

Najib was the driver behind the investment in the Cayman Islands of all the supposed profit from the ‘sale’ of its ‘PetroSaudi interests’ to Bridge Partners themselves (in the form of ‘notes’ which were then invested as ‘units’ in their hidden fund.

This money, which had been originally raised to supposedly invest in the PetroSaudi joint venture, but was largely diverted into Good Star Limited (belonging to Jho Low) has never yet been accounted for by Najib.

As the driver of all the decisions at 1MDB, through a succession of CEOs and accountants, it is simply not acceptable for him to attempt to blame anybody else or expect anybody else to account for the money.

In late 2014 an attempt was made to imply that this so-called US$2.23 billion had been ‘redeemed’ and returned as ‘cash’ to BSI Bank in Singapore, into an account managed by Jho Low’s personal relationship manager Yak Yew Chee. However, by March 2015 this ruse had been exposed as a lie, because the Singapore authorities had determined that there was no actual money in the account.

Yak was sacked and he has now been followed into ‘retirement’ by his boss at the bank Hanspeter Brunner. The so-called Brazen Sky account in question has been frozen and is under investigation.

In fact, the whole world of global financial regulators is now avidly investigating 1MDB and tracing the money trail of the missing billions, while Najib persists in alleging that first nothing went wrong at 1MDB; second that no money has gone missing and third that if something did perhaps go wrong it was owing to 1MDB executives, or Board Members or perhaps those Finance Department officials whom he had banned from being involved in the company.

Power without accountability appears to be Najib’s favourite motto when it comes to 1MDB.

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